For Bw Premier Collection, what is done with program revenues that exceed redemption costs?

According to Bw Premier Collection's 2025 Franchise Disclosure Document, revenues from the Best Western Rewards (BWR) program that exceed the costs of redeeming points are allocated to cover the operational expenses associated with running the BWR program. This means that any surplus generated by the rewards program is reinvested into the program itself, rather than being distributed as profit or used for other purposes.

This policy has implications for Bw Premier Collection franchisees because the BWR program is funded by assessment fees charged to the hotels based on members' qualified expenditures. If the program is efficiently managed and generates excess revenue, it could potentially lead to lower assessment fees for franchisees in the future. However, it also means that franchisees are directly funding the rewards program, and its financial health and management are important factors to consider.

The FDD also mentions that the company estimates breakage for points that BWR members will never redeem, impacting the revenue recognized upon point redemption. This estimate is based on historical experience and expectations of future member behavior, including analyses from third-party actuaries. This breakage is factored into the program's financial model, influencing how much revenue is available to cover operational expenses. Therefore, franchisees should understand how these estimates are made and how they might affect the overall cost and benefits of participating in the BWR program.